Preventive measures

A few weeks ago, dominoes began toppling in Colorado's insurance industry.

First one company, then another, then another took their "child-only insurance policies" off the market. The reason was obvious: Sept. 23 was approaching, the date when federal health care reform dictates that insurance companies cannot deny coverage to a child because of a pre-existing condition. The loophole, of course, is that a company is not considered to be "denying coverage" if it simply doesn't offer the coverage to begin with.

The Colorado Division of Insurance, which regulates the industry, does not keep track of how many kids are covered under child-only policies, but it's thought that child-only policies are popular with parents who can't afford to cover themselves.

The Denver Business Journal, which has reported on the terminated policies, states that Humana Insurance Co., Aetna Life Insurance Co., Cigna Corp., UnitedHealthCare of Colorado, Assurant Health, and Anthem Blue Cross and Blue Shield of Colorado have all stopped selling child-only policies. (Those currently covered under child-only policies will stay covered.)

It's pretty simple: Sick kids hurt bottom lines. With a bunch of previously "uninsurable" tots about to crowd the marketplace, child-only policies look like a losing wager. To make matters worse, as more companies drop the plans, it increases the risk for other insurers. So even more plans get dropped.

You may have read that 90,000 Anthem Blue Cross and Blue Shield customers in Colorado will share a $20 million refund, part of a settlement with the Colorado Division of Insurance. The state went after Anthem for raising premiums three times in one year, as much as 30 percent. Those and other hikes became a rallying cry that helped President Barack Obama pass health care reform.

Maybe you also remember reading that in 2009, American health insurance companies increased their profits by 56 percent, even as 2.7 million people lost private coverage. Or that, according to the U.S. Census, the proportion of Colorado children enrolled in Medicaid (government health care for the poor) leaped to 21.5 percent in 2008-9, up from 15.6 percent in 2006-7.

At first glance, six Colorado insurers jumping through a loophole to deny sick kids coverage would certainly appear to fit the pattern.

But, then again, maybe not.

Last Friday, about a dozen insurers and reps of a few organizations met with the Division of Insurance to discuss child-only policies — at the insurance companies' request. Their problem: If any kid can get insurance at any time, what's to prevent parents from simply waiting until the kid is sick? And from dropping it once he or she is better?

Cody Belzley, spokesperson for Colorado Children's Campaign, an advocacy group for children, says her organization wants to see child-only policies on the market, but she still understands the insurers' position.

"I think the concern is that insurance works because people pay into insurance even when they're healthy," she says. "...If we don't create some rules for the marketplace around enrollment, then people can just wait until they get sick and then go and buy insurance, at which point it's not really insurance anymore. At which point it's just a health care payment plan."

Belzley reports that insurance reps say changes in regulations might help them keep the policies. Belzley says some were interested in creating "enrollment periods" — allowing people to sign up for a policy just once a year. The companies also said they wanted to explore what other states had done to make child-only policies financially viable for insurers.

While child-only insurance may be in danger here, other options exist.

Medicaid and Child Health Plan Plus are available, and two other programs without income requirements cover pre-existing conditions. GettingUSCovered and CoverColorado are offered through the federal and state governments, respectively, and charge what are called "normal" premiums.

Families can also turn to "safety net" clinics like Peak Vista Community Health Centers in Colorado Springs or Rocky Mountain Youth Clinics in Denver, Aurora and Thornton.

In the coming months, a lot more parents will likely be looking for a newway to insure their kids, even if insurers continue to narrow the options.The Colorado Fiscal Policy Institute notes the following: